GERMANY Law and Practice Contributed by: Gregor von Bonin, Natascha Doll, Andreas Ruthemeyer, Stefan Schröder and Mirko Masek, Freshfields
regulation from bodies like the Federal Network Agen- cy (BNetzA). The operation of energy infrastructure, such as net- works, storage systems or LNG terminals, is typically subject to licensing or certification. Furthermore, activ- ities related to supply, trading and metering may also require prior notification or a licence. The unbundling regime, particularly for network operators, mandates a separation between generation and supply activi- ties on the one hand and infrastructure (in particular network) operation on the other. This is subject to a particularly strong regulatory regime when transmis- sion network operation is concerned. Beyond the energy regulatory regime, most installa- tions also require construction or operational approv- al, with the specific type of permit depending on the technology employed. Support for renewable energy projects is determined through competitive tenders, such as auctions con- ducted under the Renewable Energy Act (EEG) or Energy at Sea Act (WindSeeG). These awards impose strict development milestones and penalty regimes to ensure timely project completion. The overall approval timeline varies widely: small- er projects may obtain permits within six to twelve months, whereas large-scale infrastructure or offshore projects can take many years, reflecting the complex- ity of environmental assessments and public-partici- pation procedures. 5.2 Primary Securities Market Regulators The primary securities market regulator for M&A trans- actions in Germany is the Federal Financial Supervi- sory Authority, commonly known as BaFin. Specifically, the Securities Supervision Directorate within BaFin holds the responsibility for overseeing takeovers of companies whose shares are listed on a regulated market in Germany. BaFin’s role encom- passes reviewing offer documents for compliance with the WpÜG, ensuring transparency, investor pro- tection, and adherence to minimum price rules. It also establishes and monitors the timelines for takeover
offers and co-ordinates regulatory aspects when com- peting offers arise. 5.3 Restrictions on Foreign Investments Foreign investments in Germany are generally per- mitted, but certain transactions are subject to foreign direct investment (FDI) screening. The BMWE reviews these acquisitions to ensure that they do not pose a threat to national security or public order. German FDI control distinguishes between two main types of reviews, each with different scopes, trig- gers, and consequences, as outlined below. Sector-Specific Review This review applies to the acquisition of at least 10% of the voting rights in a German company by any non-EU/EFTA investor, provided the target company operates in highly sensitive sectors related to defence and classified IT security technology. It constitutes a mandatory notification obligation to the BMWE. These transactions are subject to a prohibition on closing until the BMWE has issued a clearance decision or the review period has expired without intervention. Cross-Sectoral Review The cross-sectoral review applies to acquisitions of at least 10%, 20%, or 25% of the voting rights in a Ger- man company by a non-EU/EFTA investor, depend- ing on the target’s sector. A mandatory notification is required at the 10% or 20% thresholds where the tar- get operates in highly sensitive areas (such as critical infrastructure or technologies). In other cases, inves- tors may seek a certificate of non-objection volun- tarily. Transactions subject to mandatory notification under the cross-sectoral review have a suspensory effect; they may not be consummated until the BMWE grants approval or the statutory review period lapses without intervention. 5.4 National Security Review/Export Control Germany conducts national security reviews of acqui- sitions, specifically foreign investments, to prevent security risks (see also 5.3 Restrictions on Foreign Investments ). The core objective of these regula- tions is to safeguard public order and security, which encompasses essential security interests of Germany.
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